Canada crude-Grades climb again with reduced pipe limits

CALGARY, Alberta, Feb 8 (Reuters) - Canadian heavy crudeprices rose on Friday for the sixth straight session this monthas reduced pipeline rationing made for improved access tomarkets and as Imperial Oil Ltd worked to returnoperations at an Ontario refinery to normal. Western Canada Select heavy blend for March delivery lastsold for $24.25 a barrel under benchmark West TexasIntermediate, narrowing its discount from a Thursday settlementof $25 a barrel under, according to Shorcan Energy Brokers. Thatwas its tightest differential since Oct 23. WCS gains have been steady after two months of discountsthat at times topped $40 a barrel. Surging production, tightpipeline capacity and a series of refinery outages were blamedfor the slump, and those fundamentals are largely unchanged. Imperial said it was returning operations at the 121,000barrel a day Sarnia, Ontario, refinery to normal following aundisclosed problem at the end of January. Apportionment levels on Enbridge Inc's pipelinenetwork to the U.S. Midwest are below those set for last month,easing some of the price pressure, traders have said.

In addition, the start-up of Imperial's 110,000 barrel a dayKearl project in northern Alberta, first expected to begincommercial production at the end of 2012, is now targeted forthe end of the first quarter. Full production is scheduled forthe "next several months". Light synthetic crude prices also gained on Friday. It waslast quoted at $1.30 a barrel above WTI, up 40 cents fromThursday. This week, Suncor Energy Inc and Syncrude Canadareported lower oil sands-derived crude production for January.